Big Loss By Apple And Pear Board

Press, Volume CIII, Issue 30630, 22 December 1964, Page 3

Big Loss By Apple And Pear Board

(New Zealand Press Association)

WELLINGTON, December 21. The Apple and Pear Board has this year suffered a loss of £626,000 —the biggest loss since it was formed in 1949.

The chairman (Mr K. B. Longmore) said in Wellington today the board could afford only one more loss of this size.

The board had up till this year shown a profit of £1,244,595, but this year’s loss would cut the industry’s reserve fund in half.

“Although the board was] able to predict in July that a trading loss was in store, the size of the loss has come as a great blow. We are not attempting to minimise the seriousness of the situation we face.” he said.

Mr Longmore was asked if the future of board control of apple and pear marketing in New Zealand was in jeopardy. “Not at this stage.” he replied. “Although I know that news of the loss will give powerful ammunition to those who accuse the board of inefficiency and who argue that monopoly should be ended.” Outlining reasons for the loss, Mr Longmore said unusual conditions during the season had meant not only a drop in export receipts but had left an abnormal amount of fruit for the local market to absorb. A sharp drop in local prices had resulted. The average local wholesale price was about 5s a case below the average price for 1963. bringing a net drop from the board's point of view of 4s 7d a case for 1,900,000 cases. Sales in the first five months of the year had been well behind those of the previous year. Drought in the Nelson area had produced at the beginning of the year a surfeit of small fruit for which the export market was limited. An unexpected crop increase late in the season combined with the condition of much of the fruit had caused a serious marketing problem. When the increase occurred it had been too late to arrange shipping to divert the surplus to export markets. The board had met the

problem by diverting 200,000 cases of weather-affected fruit to its canning factory—which contributed £191,000 to the loss—and a further large quantity on to the New Zealand market. DISPOSED OF The whole crop had been disposed of without recourse to dumping but only at the price of heavy losses. Export prices were on the whole good. Although exports had caused the board a loss of £35,000 they could not be regarded as unsatisfactory. The greatest part of the loss had been suffered on the local market. This was estimated at £400,000 an amount which could be regarded as a direct subsidy on the part of the industry to the local consumer. The Government paid heavy subsidies amounting to much more than the board’s

1 loss for the year, on such I products as eggs, butter and - milk but the Government subJ sidy scheme had never been 3 extended to include fruit, Mr - Longmore said. In future, the industry could not be expected to subsidise the local market and ’ the board would as far as ' possible have to take its costs " out of its local operations. , The industry was opposed "to receiving Government * subsidies,. Although reluctant , to give precise reasons for ' the opposition, Mr Longmore hinted that a desire to re--3 main completely independent 3 was the main one. The board was required by t law to buy apples and pears J from growers at a guaranteed * price. It had no influence 1 over this price which was fixed by a formula. 1 Any change in the formula o would have to be made by the s Government, he said.